Financial Aid 101
Fran C. McKeown
Higher Education Access Partner
PA Higher Education Assistance Agency (PHEAA)
Your Presenter
Topics
• What is Financial Aid
• How do I apply
• Aid sources available
• What happens next
• Making smart decisions
Financial Aid 101
What Is Financial Aid?
Financial aid consists of funds provided to students
and families to help pay for postsecondary
educational expenses.
Types of Aid:
• Merit Scholarships (Free Money)
• Grants/Scholarships (Need-Based free money)
• Self-Help (Loans, Work, Savings, etc.)
Financial Aid Made Simple
Look for FREE money first
Know your specific deadlines
Fill out the FAFSA
Compare schools financial aid offers carefully
Be sure you have the money you need
5 Steps to Financial Aid
a Step 1 Step 2 Step 3 Step 4 Step 5
Funding Sources
Federal Government
State Government
School or College
Scholarships
Financial Aid 101
APPLYING
Start with the FORMS
FAFSA – Free Application for Federal Student Aid
• Required by ALL Schools, PHEAA and some scholarship organizations
• Required every year attending
STATE GRANT FORM through PHEAA
• Required first year for all students
Some schools require additional forms:
CSS Profile – through the College Board; additional fees
Institutional Financial Aid Forms - through a specific school
KNOW WHAT FORMS EACH SCHOOL REQUIRES
Know Your Deadlines
Federal Deadlines - Apply anytime after
October 1 in the year prior to when you will attend school
(AY 2021-22: 10/1/20 to 6/30/22)
School Deadlines - vary, check websites!
PA State Grant Deadlines for FAFSA
May 1, 2021 - First-time and renewal students attending colleges, universities & college transferrable programs (excluding community colleges)
August 1, 2021 – First-time students attending community college; a business, trade or technical schools, hospital school of nursing; Open Admissions Institutions or a 2-year non-transferrable degree program at a Jr or 4-year college
Create Your FSA ID’s
• The student applying for aid and one parent providing information on the FAFSA need to create an FSA ID at fsaid.ed.gov
• Create prior to completing the FAFSA
• Provides access to FAFSA and Federal Student Aid online systems
• Legal Signature for student and parent
After verifying, the mobile phone number can be used as the username to login
Username
Password
Email Address
Mobile Phone
Security Questions
Social Security Number
FAFSA - Free Application for Federal Student Aid – FAFSA.gov
• The FAFSA is the primary federal form for financial assistance to attend postsecondary school
• Must file a FAFSA each year a student attends school to be eligible
• File online – Fast, Secure, SKIP LOGIC and Built-in Edits
• Want practice?
FAFSA4caster gives you a free early estimate of your eligibility for federal student aid.
FAFSA Steps
Login – student or parent
Disclaimer – select accept
Application Year
Save Key
Introduction
Confirmation
Sign and Submit
Financial Information
Parent Demo-graphics
Dependency Status
School Selection
Student Demographics
2021-2022 FAFSA Prep
Information Needed for FAFSA
Social Security Numbers
Federal Tax Returns and
W-2’s (2019)
2019 Untaxed Income Checking and Savings Account Statement
Balances as of FAFSA Filing Date
Investment Records Email Addresses
Whose Info Goes on the FAFSA?
YES
• Married parents living together
• Biological parents living
together
• Divorced or separated parents
The parent the student lived
with the most over the past 12
months. If equal, then the
parent who provided more than
50% of student’s support
• Stepparents – If part of
student’s household
• Adoptive parents
NO
• Foster Parents
• Legal Guardians
• Anyone else the student lives
with
FAFSA - School Selection
• Look at more than one!
• Schools will only be allowed to see your financial information when you list them on the FAFSA
• You can add up to 10 colleges at a time
• NOTE: Once your final decision is made, update your PA Grant information with the school you WILL attend.
IRS Data Retrieval Tool
After taxes are filed:
• Automatically pulls
in 2019 IRS Tax info for
parents and students
and places data into
the FAFSA
• ALSO in Student
Section, if student is
filing taxes
• If estimated income is used to complete the FAFSA, go
back later and use IRS Data Retrieval Tool
Confirmation Page
EFC: Expected Family Contribution is a
measurement of student’s and family’s
ability to pay postsecondary educational
expenses
Student contribution plus parent
contribution equals EFC
EFC stays the same for ALL schools
Parent contribution divided by number of
children in college at the same time
Pennsylvania State Grant Form
Link directly to the State
Grant Form from the
FAFSA Confirmation
Page of your
FAFSA!
Online State Grant Application
• Link off the FAFSA Application Confirmation Page
» Missed the link or it wasn’t
available?
◦ Link in an email sent to
student/parent from PHEAA,
OR
◦ Go to PHEAA.org; State Grant
Program; and complete the form
• Additional questions needed to
determine PA State Grant eligibility:
» Enrollment status (full-time/part-time)
» Value of PA 529 College Savings
Program
» Program of study for students in
vocational programs
» Employment status
Help screens are available
for all questions ?
PA State Grant Form (SGF)
Check Rights and Responsibilities Box to electronically sign SGF
Forms Are Filed – Now What?
What Happens Next?
EFC is calculated – number used to determine need
SAR/ISIR – reports information to you and your school choices
Schools and State receive your results
Grant eligibility is calculated
You Apply/Applied to your school choices
Once Accepted – schools produce Award Offer
(Aid Notification) based on Need and any Internal Aid
(Cost – EFC = Need)
You compare Award Offers
Determine true costs of school and make affordable choices
The process….. Department of Education's Central Processing System uses the FAFSA calculations to
create your NEED ANALYSIS
How is EFC Calculated?
In theory, the EFC is a number calculated to measure and compare the general financial strength of all families applying for aid - it is NOT the amount you are expected to pay. The EFC remains the same no matter which school the student attends.
• Expected Family Contribution (EFC) is determined based on:
Parent income and assets
Student income and assets
Family size
Number in college
Age of the older parent
This is NOT necessarily the amount you will pay each year!
Calculating Financial NEED
1. Using FAFSA calculations:
School Cost ……………………..........… $29,000
-EFC ……………………………………... -$ 4,000
FINANCIAL NEED ……………………... $25,000
2. FAO “Packages” students based on Financial Need and
available funding (varies by school)
3. Financial Award Offer is sent to the Student
NOTE: EFC Stays the same, Costs Vary
Special Circumstances
If things change….contact the Financial Aid Office
• Divorced or separated parents
• Recent death or disability
• Unemployment
• Reduced income
Only a school can change a FAFSA related to special
circumstances
Decisions are final and cannot be appealed to U.S. Department of Education
Contact PHEAA for PA State Grant reconsideration
Financial Aid Award Notification
• Official notification from school about financial aid, terms and conditions
• Lists the type and amount of each award to be received
• Describes what must be done to accept or reject any award
• Discloses students rights, responsibilities and academic requirements
• There is no required standard format for Award Notices
Reviewing the Financial Aid Notification
How much of the financial aid is
free money?
Which awards are based on need, and which are
based on merit?
Are there any conditions on the free money? GPA
requirement?
Will awards increase as tuition
increases?
Will awards change from year
to year?
Will loans be needed?
After reviewing their notifications, students should be sure they know and understand
the following:
Financial Aid Programs
Federal Programs
• Pell Grant - max award $6,195*
• Max EFC is 5576
• Campus-based aid (amounts determined by
Financial Aid Office at each potential school)
» FSEOG………………up to $4,000
» Federal Work-Study…FAO determines
For most programs, student must be enrolled at
least half-time.
* Goes to most financially needy students
Pennsylvania State Grant*
• In-state (PA) - Full-time: up to $4,123
• In-state (PA) – Full-time Distance Education: up
to $3,092
• In-state (PA) – Part-time: 1/2 of the FT award
• Out-of-state - Up to $526 in DC, DE, MA, OH,
VT, WV. $702 for veterans.
• Amount determined in part by the cost of the
school.
* Must be at least half-time to be eligible
Federal Direct Student Loan Program
• Available to ALL students REGARDLESS of need
• Additional unsubsidized funds available for Independent & Parent PLUS denials
» 4.53% interest rate (AY 19-20), 1.059% fee
» Rates set every July 1st for the life of that year’s loan; fees are deducted from disbursement
• In student’s name, no collateral or credit check, must sign MPN
• Available loan amounts increase in subsequent years
• No payments required while attending school & six-month grace period
• Flexible Repayment options
Based on FAFSA, students have a combination of:
• Subsidized: -government pays interest in school and grace status
• Unsubsidized:
- interest accrues in school and grace
StudentLoans.gov
& school’s website!
Federal Direct Stafford Loan Borrowing Limits
Undergraduate Students Graduate Students
Annual Limits Dependent Students
Independent or dependent students
whose parents are unable to borrow a
PLUS Loan
Graduate or
Professional Studies
1st Year
$5,500 Total
No more than
$3,500 may be
subsidized
$9,500 Total
No more than $3,500 may
be subsidized
$20,500 each academic year
Graduate / Professional
students are no longer
eligible for subsidized loans
2nd Year
$6,500 Total
No more than
$4,500 may be
subsidized
$10,500 Total
No more than $4,500 may
be subsidized
3rd Year
and beyond
$7,500 Total
No more than
$5,500 may be
subsidized
$12,500 Total
No more than $5,500 may
be subsidized
Aggregate
Limits
$31,000 Total
No more than
$23,000 may be
subsidized
$57,500 Total
No more than $23,000
may be subsidized
$138,500 Total
No more than $65,000
may be subsidized
Federal Direct PLUS Loan (parents & graduate students)
• For parents of dependent undergraduate or graduate level students
• In parent’s name for student costs
• Rates set every July 1st for the life of that year’s loan; fees are deducted from disbursement » 7.08 % variable/fixed interest rate; 4.236% fees (AY 19/20)
• Can borrow up to the Cost of Attendance
• MUST apply each year
• No Debt-to-Income test, only lenient credit check
• Can have an endorser (co-signer)
• Principal can be deferred while student is in school; Interest will continue to accrue
• IF denied – dependent student is eligible for an additional $4,000 unsubsidized loan
• Must file a FAFSA
Private/Alternative Loans
ONLY consider private or
alternative loans after looking into
all other sources of financial aid.
Private/Alternative Loans
• From private lenders or financial institutions
» In student’s name/co-signers usually required
» Can borrow up to the Cost of Attendance
» Based on credit scores and debt-to-income
» Fees, interest rates, loan amounts, and repayment provisions vary by lender
» Repayment may be deferred until education completed
» Students must sign a “Self Certification Form”
READ THE FINE PRINT
PHEAA.org/PAForward
PHEAA’s new PA Forward Student Loan Program
is designed specifically for PA students and
families.
Scholarships
• Start early – and KEEP LOOKING
• Don’t forget to continue studies!
• GOOGLE your interests
• Don’t PAY for information
• Criteria varies by school
» If you’re asked to pay, it’s not free money (SCAM)
• Don’t disqualify yourself until IT disqualifies YOU
• Don’t fear ESSAYS
• Provide what is asked
• Small scholarships ADD UP
• Activities, Athletics, Family, Hobbies, Participation,
Attributes – DO YOUR RESEARCH
• Don’t miss DEADLINES
• Write it down!
Scholarship Search Don’t miss out on FREE money!
FastWeb.com
EducationPlanner.org
Chegg.com
FinAid.org
ScholarshipExperts.com
Scholarships.com
Scholarship-Page.com
DoSomething.org/Scholarships
Colleges.Niche.com
StudentScholarships.org
BigFuture.Collegeboard.org
CollegeAnswer.com
CollegeNet.com
MeritAid.com
MORE….
Displacement vs. Stacking
Ask your college representatives:
• “If I receive an outside scholarship, will you
reduce the scholarship money you gave me by
that amount or will you stack my new
scholarship on top of what you gave me?”
• “How will an outside scholarship affect my
financial aid award offer?”
MySmartBorrowing.org
• An interactive, online
tool created by
PHEAA that helps
students and families:
» Estimate career
salaries & college
tuition
» View the impact of
savings on overall
cost
» Calculate loan
repayment
» Avoid overborrowing
MySmartBorrowing.org
How it Works
MySmartBorrowing guides students and families
through four easy sections:
Select a
Career
Select a
School
Factor in
Savings
Get Results
View the Results
Once you input your
selections, you can:
• View your potential
salary in your
new career
• Add & compare up
to four colleges
• See if you’re
borrowing too
much
QUESTIONS?
Fran McKeown
Higher Education Access Partner
Southeast Region
PA Higher Education Assistance Agency (PHEAA)
Presenter Contact Information